Indices Trade Mixed As Traders Assess Emergency Rate Cut By Fed

General Trend:

• Shanghai Composite trades flat during the morning session, IT shares decline while property sector moves higher
• Sectors moving higher in Japan include Real Estate, Iron/Steel and Electric Appliances; Banks underperform amid the decline in interest rates
• ASX 200 undperforms as banks decline after recent rate cuts by central banks
• Aussie Q4 GDP beat ests

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.7%
• (AU) AUSTRALIA Q4 GDP Q/Q:0.5 % V 0.4%E; Y/Y: 2.2% V 2.0%E
• (NZ) Reserve Bank of New Zealand (RBNZ): We are prepared to ensure a well functioning financial system; too ensure ongoing consumer and business access to credit and cash, liquidity to the baking system
• (AU) Australia Feb AIG Performance of Construction Index: 42.7 v 41.3 prior
• (AU) Australia Feb Final PMI Services: 49.0 v 48.4 prelim
• DXS.AU Advises it will cease the management of the Australian Mandate, comprising a $1.6B property portfolio from June 30th 2020, affirms FY20 DPS
• (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr to explain principals of non-standard measures, will not discuss current conditions or policy March 10th
• (AU) Australia sells A$1.2B v A$1.2B indicated in 1.25% May 2032 bonds, avg yield 0.8185% v 1.0892% prior, bid to cover 2.70x v 2.97x prior
• (NZ) New Zealand PM Ardern: Have not gotten any advice that the economy is facing a recession
• (AU) Australia Treasurer Frydenberg: Working on targeted series of fiscal measures, coronavirus is ‘substantial’ risk to the economy
• (NZ) New Zealand Fin Min Robertson: Q1 activity will be limited in terms of growth

Japan

• Nikkei 225 opened -0.9%
• (JP) Japan Feb Final PMI Services: 46.8 v 46.7 prelim
• (JP) Bank of Japan (BOJ) considering cutting economic assessment in March due to coronavirus – press
• 5401.JP Said to plan to speed up asset sales, could seek to sell over ¥400B in assets over the 3 years ending March 2021 – Japanese press
• 7201.JP CEO Uchida: Expect difficulties before things start to get better, unclear on how much further we’ll need to cut costs, all options are on the table, rebuilding North America operations is a top priority – press
• (JP) Japan reports another coronavirus case, bringing the total to 1,000 cases – Japanese press
• TM Appoints chief accounting officer, Kenta Kon as new CFO; effective April 1

Korea

• Kospi opened +0.1%
• (KR) South Korea planning KRW11.7T extra budget to deal with coronavirus; to issue KRW10.3T in bonds to fund the extra budget
• (KR) South Korea Feb Foreign Reserves: $409.2B v $409.7B prior
• (KR) North Korea leader Kim’s sister Kim Yo-Jong: It makes no sense for the South to take issue with the North’s self reliant exercises while it has “enjoyed” joint military exercises with the United States
• (KR) South Korea PM Chung: coronavirus tally may change a bit in the next 2-3 days; More than 500 new cases per day have been confirmed for almost a week – Yonhap
• (KR) South Korea equities market seeing strong buying from retail market while local and foreign institutions are seen selling – Yonhap
• (KR) Bank of Korea (BOK) holding emergency meeting with senior officials
• (KR) South Korea Vice Fin Min: Volatility in local financial market likely to remain high for some time, will take strict steps on markets if volatility rises

China/Hong Kong

• Hang Seng opened +0.1%; Shanghai Composite opened -0.1%
• (CN) CHINA FEB CAIXIN PMI SERVICES: 26.5 V 48.0E (record low); PMI Composite: 27.5 v 51.9 prior (record low)
• (CN) Speculation that China PBOC could cut rates in open market operations OMO) in March – China Securities Journal
• (HK) Hong Kong Monetary Authority (HKMA): Will continue monitoring markets and keep HK$ stable in accordance with the peg
• (HK) Hong Kong Feb PMI: 33.1 v 46.8 prior (record low)
• (HK) Hong Kong cuts benchmark interest rate 50bps to 1.50%, in line with Fed cut; as expected
• (CN) China PBOC sets Yuan Reference Rate: 6.9514 v 6.9516 prior
• (CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 12th consecutive session, Net CNY0B v CNY0B prior
• (CN) China National Health Commission Coronavirus Update for March 3rd: 119 additional cases v 125 prior; Additional deaths 38 v 31 prior; Hubei: 115 additional cases v 114 prior; additional deaths 37 v 31 prior
• 23.HK Announces strategic review of portfolio assets; has engaged Goldman Sachs as financial advisor; notes its announcement is supported by Elliott Management, Elliott to apply for a stay of proceedings which is previously commenced against the company

Other

• OPEC+ panel text: recommends extra oil production cut of up to 1M bpd for Q2
• (TW) Taiwan Stats Agency Head: To have ‘no problem’ maintaining GDP growth of 2% in 2020

North America

• (US) US Democratic Primary ‘Super Tuesday’ Update: Thus far Biden has won the most states
• (US) FED CUTS RATE BY 50BPS; SAYS VIRUS POSES EVOLVING RISKS TO ECONOMIC ACTIVITY; DECISION IS UNANIMOUS; FOMC CLOSELY MONITORING DEVELOPMENTS AND WILL USE TOOLS AND ACT AS APPROPRIATE TO SUPPORT THE ECONOMY (BIGGEST CUT AND FIRST INTRA-MEETING CUT SINCE 2008)
• FB Reportedly will not make Libra cryptocurrency product available for now – The Information
• (US) Treasury Sec Mnuchin: G7 officials in conf call agreed to do everything possible to limit harm from coronavirus – House testimony
• (US) Fed’s Evans (dove, non-voter): Thought the Fed was very well positioned but felt rate cut would help boost confidence given rising risks and possible economic weakening, expectation is that virus will have short lived imprint on US, like to be 1/4-1/2 year impact on the economy with a v-shaped recovery

Europe

• (CZ) Czech Central Bank Vice Gov Mora: Does not plan any steps to help the economy at the moment – local press
• (DE) German Fin Min Scholz: spread of coronavirus will have consequences for the economy; will use all resources to tackle the coronavirus
• (UK) UK Chancellor of the Exchequer Sunak reportedly will levy 3% tax on non-residents who are buying property – FT

Levels as of 12:15ET

• Hang Seng -0.2%; Shanghai Composite -0.2%; Kospi +2.1%; Nikkei225 +0.3%; ASX 200 -1.8%
• Equity Futures: S&P500 +1.2%; Nasdaq100 +1.3%, Dax +1.4%; FTSE100 +1.0%
• EUR 1.1185-1.1155; JPY 107.50-106.86; AUD 0.6615-0.6576; NZD 0.6298-0.6266
• Commodity Futures: Gold -0.1% at $1,643/oz; Crude Oil +1.5% at $47.88/brl; Copper +0.3% at $2.59/lb